After a crossing of paths at the Cannes Lions last summer, Jesper Albansson Chief Marketing Officer, Ocean Outdoor Nordics caught up pre Christmas with the legendary Les Binet to discuss the value of brand building to the long term health of the balance sheet. And the effect it should have on 2024 media budget placement.
Jesper Albansson: A challenge that marketers seem to be having – especially in times where every cent counts – is how to make the case for long-term brand investment.
Do you think marketers need to rearticulate and possibly reposition marketing internally to build rapport with the CFO and the rest of the C-Suite and if so, what is it we need to change in our narrative and do differently?
Les Binet: We need to start talking the language of finance. Commercial advertising is always about sales and profit, even if the payback takes time. Stop talking about “awareness” and “image” and start talking about “cashflow” and “shareholder value”. If we can measure and prove that brand ads generate profit, CFOs will give us their blessing.
JA note, in a WARC interview from 2020 Les elaborated: “To put it in financial language, activation is about getting an immediate response and, ideally, an immediate sale but maybe nothing more. Brand building is about getting a long-term flow of sales, revenue and profit, now and into the future”.
JA: There are a lot of metrics in marketing. Which ones sit at the top of your list and why?
LB: The most important metric is shareholder value. Effective advertising generates big profits, and makes companies more value. Shareholder value, calculated through Discounted Cashflow Analysis, is the correct way to measure this. Note that this is NOT the same as ROI.
JA: Brand building was never gone away but for some time it felt like it was standing in the shadow of performance marketing. With the increased amount of available research and leading industry voices that make the case of creativity and consistency as business drivers, have we arrived at a more balanced discussion and perception of long term brand building in relation to “short-termism”, the latter a phrase I believe you’ve coined?
LB: Maybe. I do feel like the tide is turning a bit. In particular, some of the Big Tech companies seem to be quoting our work and following our principles. And where Big Tech goes, others eventually follow. I hope.
JA: I know of your interest in Share of Search. For those new to it, when did you start looking into it and what kind of metric is it?
LB: Share of Search measures the likelihood that people will search for your brand rather than a rival. Simply count the number of organic searches for your brand, and divide it by all the rival brand searches. Note that this is all about organic search volumes, not paid search advertising. I think it’s a useful indicator of interest in a brand – a top-of-funnel metric, if you will. I’ve been experimenting with it since about 2011.
JA: Ok Les, last question. I found a quote from a WARC interview with you that read “Companies like Google and Amazon have spent 20 years building up long runs of performance data, and they’re the ones who are now piling back into traditional ad media like outdoor. The rest of the marketing community should take note.” Would you care to elaborate a little on this?
LB: Yes, companies like Google and Meta, who built themselves on performance marketing and metrics, are now realizing the limitations of those metrics. They’re increasingly turning to econometrics instead. And that may be one reason they are beginning to pay more attention to brand advertising and broadcast media, which econometrics is much better at measuring.
Let’s hope that leads to a more balanced media diet!
No one can tell with 100% certainty where we will end up in 2024 but let us remember the words from Les Binet above:
”I do feel like the tide is turning a bit. In particular, some of the Big Tech companies seem to be quoting our work and following our principles. And where Big Tech goes, others eventually follow.”
Ignore Les Binet at your peril.